A three-month-old baby was killed and seven other people were wounded on Wednesday evening when a Palestinian drove his car into a light rail train station near Ammunition Hill in Jerusalem and ran over over passersby disembarking from the train.

A 20-year-old woman was in serious condition following the attack, two people were moderately hurt and four more were lightly wounded.

In Washington, the U.S. State Department said the baby was "reportedly an American citizen," but did not elaborate.

The driver, who was shot by police trying to flee the scene, succumbed to his wounds in hospital hours later. He was identified as Abdel Rahman Al-Shaludi, a Palestinian resident of the East Jerusalem neighborhood of Silwan, who in the past served prison time for security offenses.

According to witnesses, Al-Shaludi drove the car 14 meters on the tracks itself, hitting disembarking passengers and continuing on along the length of the track. He stopped after hitting a pole a few hundred meters down and then attempted to flee on foot, when he was shot, arrested, and hospitalized.

Police later arrested the suspect's 15-year-old brother, after riots broke out around the family home.

An eyewitness reported seeing the car hit the mother and baby and continue plowing through the crowd. “The stroller was shattered and the mother was screaming.”

Rescue personnel arrived on the scene and began treating the wounded. Magen David Adom medic Hanoch Zelinger said his was the first ambulance on the scene. “I saw two people who appeared to be injured fairly seriously, but then they brought in a baby with no pulse and serius head injuries. We immediately began rescucitation procedures and got a pulse in the infant. We took her to the nearest emergency room with both parents riding with us. They said the car came out of nowhere. The stroller flew into the air and the baby was found 10 meters away from the stroller.”

The baby, Haya Zissel-Brown, was taken to Hadassah Har Hatsofim hospital in critical condition, breathing with the assistance of a ventilator. She was pronounced dead two hours later after all efforts at resuscitation failed. Her funeral was scheduled for midnight.

Ultra-orthodox Jewish mourners carry the body of three-month-old baby Chaya Zissel Braun during her funeral in Jerusalem on October 23, 2014 (AFP)

The slain baby's grandfather, Shimon Halperin, told reporters Wednesday evening that her parents had waited many years for a child, and they were completely shaken. "The doctors did everything they could and I want to thank them," he said.

“As I have said for months, the situation in Jerusalem is intolerable and we must act unequivocally against all violence taking place in the city,” he said in a statement. “Today, more than ever, it is clear that we must send police forces into neighborhoods where there are disturbances, placing them strategically and widely in significant numbers.”

Netanyahu also held Palestinian President Mahmoud Abbas accountable for the attack. "That's how Abu Mazen's [Abbas'] partners in government act, the same Abu Mazen who just a few days ago incited to an attack on Jews in Jerusalem," said Netanyahu, referring to Abbas' call on Friday to Palestinians to use "any means" to bar the settlers from the Temple Mount.

U.S. State Department Spokeswoman Jen Psaki issued a statement condemning the attack in the "strongest possible terms," and urged all sides to maintain calm and avoid escalating tensions.

"We express our deepest condolences to the family of the baby, reportedly an American citizen, who was killed in this despicable attack, and extend our prayers for a full recovery to those injured," said the statement.

Early morning on Thursday, Defense Minister Moshe Ya'alon said over Twitter that the attack was the product of education for "hatred for Jews" in the Palestinian Authority.

"There is and there never has been a culture of peace in the Palestinian Authority, only a culture of incitement and of jihad against Jews," the defense minister tweeted.

The attack was suspected to be what in Hebrew is termed a "run-over terror attack." This kind of attack has been used several times in the past in Jerusalem, most recently in August, when a Palestinian man driving a digger in Jerusalem used his vehicle to flip over a bus, killing Avraham Walles, a 29-year-old father of five. Five others were lightly wounded in the attack: the bus driver, three passengers and a police officer. The incident, which took place in the Shmuel Hanavi neighborhood, was declared a terrorist attack.

An Israel Prison Service officer who was near the scene as the digger attack unfolded joined a police officer in firing toward the digger driver, Naif Jabis of Jabek Mukaber, who was consequently killed. The IPS officer was lightly wounded while trying to pull the assailant out of the vehicle.

In July 2008, three people were killed and dozens were wounded when a Palestinian from East Jerusalem deliberately plowed a bulldozer he was driving into a passenger bus on Jaffa Street in Jerusalem.

Two weeks later, 24 people were wounded when a Palestinian from East Jerusalem plowed a bulldozer into five vehicles before being shot.

Last year, a Palestinian was killed by IDF troops after smashing through the fence around an army base north of Jerusalem, on a bulldozer. One soldier was lightly wounded. The Palestinian apparently planned to commit an attack inside the A-Ram base by running over anyone who happened to cross his path, a senior officer said in a briefing for reporters.

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